Four decades of supporting Nordic green solutions

In 2022, Nopef celebrated its 40th anniversary. Mikael Reims, Head of Origination at Nefco, shares his insights on why Nopef’s mission to support the global growth of Nordic green solutions is more important than ever and the kinds of companies that can benefit from Nopef financing.

Mikael Reims

Mikael Reims, VP, Head of Origination at Nefco. Photo: Jussi Ratilainen for Nefco

Why is Nopef a relevant financing option for Nordic SMEs?

Nopef has adapted and updated its financial instruments since its establishment in 1982, but its core objective remains the same: help innovative Nordic SMEs identify growth opportunities and establish a foothold on international growth markets.

The Nordic countries are leaders in developing highly innovative and competitive solutions, but many companies within the region lack the necessary resources to take the first step into a new and demanding market. Nopef can offer critical support in this challenging growth stage.

By focusing on the most promising green and sustainable solutions in its financing activities, Nopef has consistently improved its results over the years, in terms of project success rates as well as commercial and economic results, such as job creation and investments. This further underlines the strong link between sustainability and international competitiveness.

Why the environmental focus?

Nopef’s key objective is to support the programme initiatives in the Nordic Vision to make the Nordic countries the most sustainable and integrated region in the world. By combining four decades of experience supporting the internationalisation of Nordic SMEs with the environmental expertise of Nefco, the fund’s manager, Nopef is in a unique position to achieve this ambition.

Nopef’s environmental mandate was introduced in 2014, when Nefco took over as the fund manager. However, green growth was one of Nopef’s key focus areas long before this. Today, Nopef’s financing and environmental criteria often serve as a stamp of quality for the projects it supports, helping companies to establish themselves in their target markets.

What type of companies can receive Nopef financing?

Projects financed by Nopef have the potential to provide concrete and measurable environmental benefits. Nopef has a flexible mandate to finance sustainable Nordic SMEs across a range of sectors, such as circular economy and sustainable business models, ocean economy, green transport and sustainable building and construction. The sectors Nopef finances are directly linked to the specific initiatives of the Nordic Council of Ministers’ action plans for the Nordic Vision.

The demonstration value and scale-up potential of solutions are also important: Nopef prioritises projects that will demonstrate a sustainable Nordic solution on a new international market and create opportunities for further scale-up and growth in the coming years.

What does a typical Nopef project cycle look like?

One reason for Nopef’s continued popularity and high demand among Nordic SMEs is its relatively simple and straightforward application process. Nopef accepts new applications on an ongoing basis with an average processing time of six to seven weeks. We maintain an active dialogue with the company and support them throughout the project cycle.

Once a project has been approved for funding, the average feasibility study funded by Nopef takes 1-2 years to complete. During this period, the company undertakes all necessary activities and analysis needed for its investment decision, including developing a business plan, holding meetings with stakeholders in the project country, conducting assessments of legal, financial and commercial issues, and identifying and assessing potential risks.

After the final project report has been approved by Nopef, the disbursed funds can be converted from a conditional loan into a financial grant to the client company.

40 years on – what’s next?

This year, Nopef is collaborating with Nordic Innovation and Nordic Innovation Houses in Tokyo and Singapore to boost Nordic companies’ growth efforts in Asian markets. Our goal is to create new business opportunities for Nordic companies while identifying synergies and testing new operating models between the organisations.

Nefco is proud to continue in its role as the fund manager of Nopef and the continued collaboration and cross-promotion of financing opportunities is likely to speed up the global growth of many Nordic SMEs in the coming years.

Nopef (Nordic Project Fund) is funded by the Nordic Council of Ministers and managed by Nefco – the Nordic Green Bank.